Tesla wants to develop its own music service

The Washington Post|

Jun 23, 2017 | 12:35 PM

Tesla CEO Elon Musk with the company's Model X. (Tesla Motors)

It may not be enough for the electric car company Tesla to take on the giants of Detroit, like General Motors and Ford. The Palo Alto-based automaker is said to be exploring its very own music streaming service too, a move that would pit the company against market leader Spotify, and the aggressive efforts by Apple to conquer the world of on-demand music.

As part of its souped-up dashboard, Tesla is considering the idea of offering drivers a personalized listening experience, and has had talks with major record labels to develop an in-house music platform, according to Recode.

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The rush to bring Internet music not only to people's phones, but to their connected homes and cars is lucrative territory with even more potential, experts say. And Tesla's tight control over the look and feel of its cars might lend itself to an improved music experience — with high-definition audio and an intuitive dashboard — that's better designed than add-on services.

"One thing to watch will be the degree to which other car manufacturers follow Tesla's lead and start trying to control the in-car experience," said Mark Mulligan, a digital music market analyst. "There have already been some efforts in this direction, but so far partnerships and integrations have been the norm."

As Tesla considers a dive into the battle royale already playing out in the streaming market, it confronts the loyalties and habits of music subscribers, whose time and effort spent curating playlists and radio stations might make them harder to convert. "Not only will Tesla need to focus on what a great in-car experience looks like, it will have to build a multiplatform user experience that competes with the best-in-class mobile experiences like Spotify's," Mulligan said. "Tesla users will have little interest in having to use one streaming service in the car and one everywhere else, having to build two sets of playlists and cloud libraries etc."

Compounding this challenge is the question of Tesla's limited scale and the viability of building a new streaming product from scratch. Tesla counts about 100,000 customers compared with Spotify's 50 million subscribers. About 27 million users have used car systems integrated with the music service Pandora, for instance. And more than 200 car models allow drivers to control Pandora right from the dashboard, a company representative said.

Tesla did not immediately respond to a request for comment, but a representative told Recode, "We believe it's important to have an exceptional in-car experience so our customers can listen to the music they want from whatever source they choose."

As challenging as Tesla's move might appear, Jessica Caldwell, the director of industry analysis with the auto research website Edmunds.com said it could play into Tesla's allure as a top-tier, innovative brand. "Tesla has a certain amount of cachet they have built up over time, they have this cool factor that no other car company has," she said. A personalized music service also bolsters Tesla's mission of controlling the customer experience, and could further differentiate the company as competition for high-end electric cars intensifies.

But ultimately, even for Tesla, Caldwell is skeptical, given the level of difficulty of breaking into the music market. "For someone who is trying to do so many things, this seems like a bit of a stretch."